Stock market plunge could hurt O.U. budget

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An Ohio University distinguished professor of economics says public higher education institutions could be hurt by the latest developments on Wall Street.

Richard Vedder says yesterday's stock market plunge prompted by the U.S. credit rating downgrade hurts university endowments and public pension funds.

He says he doesn't think it's likely, but there's a chance that mid-term budget cuts will have to be made at O.U. and other public universities across the state.

"Where it could hurt Ohio University and other institutions is we are dependent on state appropriations and if we were to have this recovery completely abort and if state revenues started to languish again, it is possible there would have to be some mid-term budget adjustments at the universities." said Vedder.

Vedder says he doesn't see the economic situation getting much better soon.

"There's clearly an enormous amount of lack of confidence by investors in the american economy right now, brought about by, let's just roughly say, public policy issues, related to the debt ceiling and other matters and it has the potential of causing us a period of considerable stagnation."

The Dow plunged 634 points yesterday.

It was the worst one day drop since 2008.

Worries are rising that both the U.S. economy and Europe's debt problems are worsening.